1998 (11) TMI 637 - AT - VAT and Sales Tax

Summary

Issues:
Common question of law regarding shortage in the quantity of prawns intended for export.

Analysis:
1. The tax revision cases were filed against the orders of the Appellate Tribunal regarding the shortage in the quantity of prawns intended for export. The assessees contended that the shortage was due to the removal of inedible portions of the sea-foods and keeping processed prawns in deep freezer until export. The assessing officer levied purchase tax for the shortage under the Tamil Nadu General Sales Tax Act, which was the disputed turnover in the revisions.

2. The assessees argued that the unshipped quantity was not locally sold or utilized for other purposes, and the shortage was due to unavoidable wastage in the course of export. The learned Senior Counsel cited various decisions supporting exemptions for wastage during export processes. The Tribunal considered the percentage of loss in each case and found that the levy of tax in certain cases was not proper and set aside the orders of the Appellate Tribunal regarding the shortage in the weight of prawns intended for export.

3. In some cases, the Tribunal set aside the orders of the Appellate Tribunal and granted exemption under section 5(3) of the Central Sales Tax Act for the deficit quantity. However, in one case, the matter was remanded back to the assessing officer to determine the actual probable wastage. The Tribunal concluded that the assessees were entitled to exemption for the quantity lost due to unavoidable wastage during the export process, while the balance would attract purchase tax.

4. The Tribunal's decision was based on the principle that goods purchased for export are entitled to exemption from purchase tax, not only for the quantity exported but also for inevitable wastage sustained during the export process. The Tribunal considered the percentage of loss in each case to determine whether the shortage mentioned by the assessees could be considered real with reference to the quantity purchased.

5. Ultimately, the Tribunal set aside certain orders, granted exemptions for deficit quantities in some cases, and remanded one case back to the assessing officer for further investigation. The Tribunal's decision aimed to ensure that the assessees were not taxed for unavoidable wastage during the export process, while also upholding the principles of tax liability for the actual quantities exported.